Let me be blunt. If you have to ask "What papers?" you're almost certainly talking about what you imagine the simulation hypothesis to be, and not the simulation hypothesis. (I acknowledge that even 'believers' have often not read any papers on it.) Both a google search or a look at the Wikipedia page would get you started. But you can find Bostrom's philosophical argument here: https://simulation-argument.com/simulation/ (And if you find it interesting, he and others have written follow up papers.

The practical difference is that you can reason about simulation and potentially prove or disprove it. It is potentially testable (and papers have been written suggesting ways we might do so). Although the simulators would be extremely powerful from our point of view, they aren't posited to be omniscient and perfect. It is also possible to address Bostrom's arguments directly with reason. I argued that whether we are in a simulation or not, we cannot be in a Bostrom-style simulation because as I understand his argument it necessitates infinite computation and either infinite energy or infinite time; any of which, in my opinion, break his argument. I also think I could make a case that test-ability itself disproves it.